7 That You Need Know Before You Start Investing …
Posted By George on September 17, 2009
Copyright 2006 Jason Chew
1. Know your financial situation at this time. You know the level of debt. You calculate the income and expenditure by taking into account the following:
Mortgage repayments
Personal tax
Loans and overdrafts
Live
Emergency fund
Car expenses
Entertainment
Vacation
School fees
Credit card debt
Family commitments
Before you start investing your money in investment products, you need to know how much you can spare each month for investment. General rule is that, you must remove your debt first, then save and invest later. Ie, the more money you invest now, it will be better for your future. I would say set aside 10% of your income for rainny days. 10% is the amount that small you will not feel an emergency. Save until you have successfully built a “dam management of funds.”
2. Setting up funds for dam management. This is in line with point 1. You must maintain a minimum of 3 to 6 months income ofyou as dam management. After the successful conduct of the additional money saved can be used to invest.
3. Protect yourself and your family first. With this, I mean you must have basic life insurance to ensure that you and your family against accidents and terminal illness. This is very important because even though you may loose all the money through investment, and if you or a family member who needs medical attention, it will be a good treatment.
Of course aware that the need for a high risk tolerance or need for your low risk tolerance really has no regard to how you feel about risk. Once again, there are many in determining your tolerance.
For example, if you invest in the stock market and you watched the movement of stock daily and saw that it decreased a little, what will you do?
You akan akan you sell or let your money ride? If you have a low tolerance for risk, you want to sell out … if you have a high tolerance, you will let your money ride and see what happens. This is not based on what your goal is financial. This tolerance is based on how you feel about money!
Once again, a good financial planner or stock broker will help you determine the level of risk you are comfortable with, and help you select the appropriate investment.
Your risk tolerance should be based on what your financial goals are and how you feel about the possibility of losing your money. It’s all tied in together.
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